Fed Officials Growing Wary of Market Complacency

Expectations for Rate Hikes Might Be Out of Line With Fed's

By

Jon Hilsenrath

Updated June 3, 2014 7:30 p.m. ET

Federal Reserve officials are starting to wonder whether a tranquillity that has descended on financial markets is a sign that investors have become unafraid of the type of risk that could lead to bubbles and volatility.

The Dow Jones Industrial Average, up a steady if unspectacular 1% since the beginning of the year, has consolidated big gains registered last year. The VIX, a measure of expected stock-market fluctuations based on...